The U.S. Court of Appeals for the D.C. Circuit today dismissed the petition to rehear en banc last year’s landmark ruling that the heirs of the art dealers who sold the Guelph Treasure (or Welfenschatz) may pursue their claims in U.S. federal court. Defendants the Federal Republic of Germany and the Stiftung Preussischer Kulturbesitz (the SPK, or Prussian Cultural Heritage Foundation in English) had argued that claims under the Foreign Sovereign Immunities Act’s expropriation exception such as these are not violations of international law and also require a claimant to exhaust remedies abroad, a position rejected by prior decisions of the D.C. Circuit and by today’s ruling as well.

Today’s decision confirms the first-of-its kind holding last year that a German state museum must face claims based on allegations of Nazi-looted art, a direct result of Germany’s failures through its so-called Advisory (often called Limbach) Commission to address seriously and comprehensively the state of Nazi-looted art in its national collections. In the five years since denying the Guelph Treasure claimants any meaningful attention, Germany has fumbled through the Gurlitt fiasco and attempted other various distractions like its new fitful attention to colonial art (with no real progress there either). Germany has repeatedly disparaged my clients by suggesting that the matter was already "decided on the merits" before Germany's Advisory Commission. This is false. The Advisory Commission renders non-binding recommendations to state museums and has been roundly criticized for its opinions in 2014 and 2015 in particular, when my clients were denied justice. There is no small irony in having to explain this in the context of Germany's request for a do-over after last year's ruling.

Debate has peaked in the last year or so about the treatment and possible restitution of so-called colonial artifacts in Western (i.e., European and North American) museums. The conversation is important for many reasons, but one interesting facet is the way in which the discussion moved from a peripheral topic to one consuming high-level government attention in a very short amount of time. In the process, institutions that have been devoted for well over a century to artistic, archeologic, and ethnographic displays have found themselves in a very public conversation about the future and even the validity of their mission. This discourse culminated last fall in a report commissioned by President Emmanuel Macron, authored by Bénédicte Savoy of France and Felwine Sarr of Senegal, recommending (among other things, as discussed below), that objects sent to France should be returned if the country of origin requests it. Germany has now joined the conversation with the announcement of a collective declaration addressed to the collection of German federal and state museums.

The New York Timesreported yesterday that the German Lost Art Foundation had removed several paintings once owned by the Viennese cabaret actor Fritz Grünbaum from the Lost Art database. While the history of these objects is hotly contested, it was a particularly strange choice given that Grünbaum’s heirs just won a judgment earlier this year that the works by Schiele must be returned to them—by reason of Nazi duress. For a database that has never been suggested as an adjudication of rights but rather as a repository of notice to the world of possible title issues, it was a perplexing choice. Against the backdrop of the party that the German government and the foundation are throwing themselves in November for which few outsiders have been able to register, the explanation appears much less benign particularly against the backdrop of the government’s historical revisionism in U.S. federal court litigation.

(WASHINGTON-July 10, 2018) The U.S. Court of Appeals for the D.C. Circuit has affirmed the right of the heirs to the so-called Guelph Treasure (known in German as the Welfenschatz) to seek restitution in U.S. courts for the value of the treasured art collection. The appellate court rejected Defendants’ arguments that U.S. courts lack jurisdiction, or that Germany’s treatment of its Jews in the 1930s should be immune from judicial scrutiny. While the Federal Republic of Germany itself was dismissed as a defendant, the actual possessor and key party in interest (the Stiftung Preussischer Kulturbesitz, or SPK) must now prove that a 1935 transfer of the collection by a consortium of Jewish art dealers to Hermann Goering’s minions was a legitimate transaction if they are to retain the collection.

As Germany puts on the much-anticipated exhibition in Bonn of Cornelius Gurlitt’s disputed collection, a strange story has developed not too far away in Düsseldorf. The Stadtmuseum, which is administered by the city itself, had organized—but now cancelled—“Max Stern: from Düsseldorf to Montreal.” The exhibition was scheduled to open in February in Düsseldorf, before traveling to the Haifa art museum in September of 2018 and to the McCord Museum in Montreal in 2019. The city’s acknowledgement that the decision was based on a claim for restitution from the Max Stern Estate is a disturbing development that provides no sound reason to cancel a show about an important dealer who, it is undisputed, was a seminal figure of Nazi persecution.

The German government announced recently that it had returned an additional work of art found in the Salzburg home of Cornelius Gurlitt in connection with the 2013 revelation of Gurlitt’s trove of art originally in the possession of his late father Hildebrand. La Seine, vue du Pont-Neuf, au fond le Louvre by Camille Pissarro (1902) has been returned to the heirs of Max Heilbronn, from whom it was taken in 1942 in France. The accompanying announcement was of a piece with the ongoing fiasco of the Gurlitt affair: a press release touting the personal involvement of Germany’s Minister of Culture Monika Grütters, a self-serving but vague statement about commitments to restitution, and absolutely no explanation or update about what is happening to the hundreds of additional paintings and objects under investigation. The press release was also sure to mention an upcoming exhibition of Gurlitt collection works later this year. In sum, the announcement confirms precisely the opposite of its intended effect.

The decision on Friday to allow our clients’ claims to proceed against German and the Stiftung Preussischer Kulturbesitz for the restitution of the Guelph Treasure (or Welfenschatz) is ground-breaking in important respects, and a welcome part of a consistent progression in the law of sovereign immunity over claims for Nazi-looted art. As we noted in our initial reaction, it is the first decision in which a U.S. court has held that it has jurisdiction over Germany or an agency or instrumentality of it under the Foreign Sovereign Immunities Act (FSIA) for a claim to Nazi-looted or purchased art—though others have certainly tried—in this case finding the so-called expropriation exception applies. Critically, it recognizes that claims about forced sales in the early days of Nazi persecution indeed create jurisdiction. Moreover, the court agreed with our clients that Germany’s various excuses to avoid litigating the substance of a forced sale involving Hermann Goering based on pleas for deference or respect to the flawed Advisory Commission are no reason to dismiss the case.

Supposed Changes to German Advisory Commission on Nazi Looted Art Short on Specifics

There have been a number of articles this week indicating that Germany intends to reform the “Advisory Commission on the return of cultural property seized as a result of Nazi persecution, especially Jewish property” (Beratende Kommission im Zusammenhang mit der Rückgabe NS-verfolgungsbedingt entzogener Kulturgüter, insbesondere aus jüdischem Besitz) that is charged with making recommendations to German museums on claims for art allegedly looted or bought under duress during the Nazi era. Yet the most astonishing part of the news is that it is no news at all. It is merely a repetition—if that—of what was promised in March. Only now it is not even a promise, it is an indication that proposals may be forthcoming at some indefinite point in the future. It is further evidence that the entire endeavor does not deserve to be taken seriously. At best, the “reforms” would address some of the appalling discriminatory comments made earlier this year. But nothing proposed so far would compel a museum to submit to the commission, about which Bavaria in particular—the federal state that isin the midst of its own scandal for returning art to actual Nazis while giving heirs the runaround—notoriously refuses even to appear before the commission

About the Blog

The Art Law Report provides timely updates and commentary on legal issues in the museum and visual arts communities. It is authored by Nicholas M. O'Donnell, partner in our Art & Museum Law Practice.

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